Financial Capital and Small Business Startups

摘要

The study examines the financial capital structure of three groups of small business startups: firms created by white males, Asian males, and females. Three interrelated aspects of firm capitalization are examined: the absolute size of financial capital inputs, the sources of debt for small business startups, and the impact of financial capitalization at startup on the subsequent viability of small firms. Econometric models are utilized to identify the traits that are most directly associated with small business viability. Plainly stated, well educated business owners employing larger financial capital inputs are more likely to create viable firms than poorly educated cohorts whose inputs of financial capital are less bountiful. The importance of bank financing to the small business startup process cannot be overemphasized.